easyMoney reveals where to find the best yields on BTL portfolios
Ready-made buy-to-let portfolios offer the best yields in Yorkshire and Humber, while returns in the capital are among the lowest, easyMoney research has found.
The peer-to-peer lender property lender analysed the current availability of ready-made property portfolios for sale across Great Britain. These types of portfolios are usually put together and placed on the market by investors, to be purchased by experienced investors who will buy multiple assets in a single transaction.
easyMoney’s analysis revealed that there are currently 884 portfolios for sale in Great Britain at an estimated average price of £1.2m, offering an average yield of 3.4 per cent.
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A regional break-down showed that there are 166 ready-made portfolios for sale in London, equivalent to 19 per cent of the national total.
However, the average portfolio size is almost £2m, the most expensive region in the country.
With an average portfolio size of 4.9 bedrooms – the smallest of all regions – the expected rental yield is just 2.1 per cent, second only to Wales (two per cent) as the lowest in Britain.
In contrast, the Yorkshire and Humber region offers an average portfolio size of 11 bedrooms and an average purchase price of £898,415, meaning landlords can expect impressive yields of 6.1 per cent.
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The East Midlands also offers attractive portfolios, with a slightly lower average cost of £879,012. This buys investors an average of 9.2 bedrooms which is the second-most of all regions, and results in an expected rental yield of 5.7 per cent.
“Property investment is extremely popular due to its reliable returns over the long-term and the repeated monthly rental income available in the short-term,” said Jason Ferando, chief executive of easyMoney.
“Most investors start their journey with a single buy-to-let property, but for those who are looking to take the next step, ready-made portfolios can be the perfect option as much of the ground work has already been done, and it’s much faster than building a portfolio piece by piece.
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“Of course, buying a portfolio requires the investor to have large amounts of money up-front, and the ongoing requirements after purchase can be a lot for some investors to deal with, forcing landlords to work very hard for their monthly yield.
“That’s why lots of property investors are instead choosing to put their money into Innovative Finance ISAs which essentially enable investment across a wide range of property projects and opportunities, while maintaining a hands-off approach. What’s more, the returns available from IFISAs are often as good as, if not superior, to the rental yields one can expect to get from managing a full portfolio by themselves.”